FYI: NY Enacts Law Affecting Mandatory Foreclosure Settlement Conferences, Pre-Foreclosure Maintenance and Registration as to Vacant Properties
via Maurice Wutscher LLP-
On June 23, 2016, New York Governor Cuomo signed S8159 (attached) into law, which among other things contains provisions relating to:
- Mandatory settlement conferences in residential foreclosures. The new law modifies New York's mandatory settlement conference provisions for residential mortgage foreclosures to among other things allow courts to sanction mortgagees up to $25,000 and award attorney fees in favor of the borrower for non-compliance, clarify that the failure to offer or accept an offer is not sufficient to establish lack of good faith participation, and allow borrowers who participate in settlement conferences to have defaults vacated
- A pre-foreclosure duty for mortgagees to register and maintain vacant properties. The new law imposes a duty on mortgagees to register, maintain and secure residential real property collateral where there is a reasonable basis to believe the property is vacant and abandoned, allows penalties of up to $500 per violation, per property, per day, and provides for a state-wide electronic registry of vacant and abandoned properties as well as communication between local governments and mortgagees.
- An expedited or fast-track foreclosure process for vacant and abandoned properties. The new law allows mortgagees to file a motion or application in residential foreclosures to have the collateral property deemed vacant and abandoned, provides standards for the court to use in determining whether a residential property is "vacant and abandoned," requires related disclosures to the mortgagors, prohibits mortgagees from trying to force occupants of the property to vacate or abandon the property, allows judgments of foreclosure and sale to be entered quickly if the court finds that the property is vacant and abandoned, and sets deadlines for conducting foreclosure auctions and marketing REO.
- New default disclosure requirements. The new law requires the New York Department of Financial Services to publish a "Consumer Bill of Rights" detailing the rights and responsibilities of the parties in foreclosure and for courts to provide the disclosure to foreclosure defendants, revises the language of New York's mandatory pre-foreclosure notice (including translation obligations "for any borrower known to have limited English proficiency"),